Dollar edges higher in Asia as the market looks toward US rate hikes

TOKYO--The dollar edged up against the euro and the yen in Asian trade Thursday, building on the 11-month high it reached against the European currency overnight as the market eyed U.S. rate hikes.

In afternoon Tokyo trade, the euro was quoted at US$1.3244 and 137.55 yen, down from US$1.3258 and 137.57 yen in New York late Wednesday.

The dollar fetched 103.86 yen, up from 103.76 yen.

The greenback's climb came after the U.S. Federal Reserve released minutes from its July 29-30 meeting showing policymakers increasingly at odds over how strong the labor market is and what that means for inflation — a key issue in planning rate hikes next year.

The intensifying debate signaled an increased, albeit still measured, level of hawkish sentiment in the Fed that could speed up any rate hike.

The dollar rose after the Fed minutes "pointed to more lively debate over U.S. labor market improvement and what that might mean for the timing of the start of rate normalization," National Australia Bank said in a statement.

Traders are now awaiting Fed Chair Janet Yellen's address to the Kansas City Fed on Friday for clues on how the U.S. central bank chief is thinking, it added.

The dollar-yen rate is set to test the 104 yen level, driven by rallies in Japanese stocks as well as minutes from the Fed meeting, Minori Uchida, chief currency analyst at the Bank of Tokyo-Mitsubishi UFJ, told Dow Jones Newswires.

The dollar was mostly stronger against other Asia-Pacific currencies.

It rose to SG$1.2519 from SG$1.2480 on Wednesday, to 32.06 Thai baht from 31.91 baht and to 11,724.50 Indonesian rupiah from 11,701.50 rupiah.

The greenback also advanced to 1,023.90 South Korean won from 1,022.54 won and to 43.82 Philippine pesos from 43.81 pesos.

It slipped to 60.63 Indian rupees from 60.73 rupees.

The Australian dollar fell to 92.53 U.S. cents from 92.98 cents, while the Chinese yuan rose to 16.88 yen from 16.79 yen.